Power Financial reports Q2 profit of $433 million, revenue up from year ago

WINNIPEG – Power Financial Corp. (TSX:PWF) reported Friday a drop in its second-quarter profits compared with a year ago as results at its subsidiaries slowed.

The Montreal-based conglomerate, which has stakes in the Mackenzie, Investors Group and other mutual fund operators as well as Great-West Life, earned $433 million or 61 cents per diluted share for the quarter.

That compared with a profit of $507 million or 71 cents per diluted share a year ago.

Revenue totalled $8.37 billion, up from $7.78 billion.

Power Financial said the results for the quarter were hurt by its share of a non-cash income tax charge recorded by IGM Financial Inc. and goodwill impairment and restructuring charges recorded by Lafarge SA (Lafarge).

For the quarter, Great-West Lifeco Inc. reported operating earnings attributable to common shareholders of $491 million or 51.7 cents per share, down from $526 million or 55.3 cents per share a year ago. Its contribution to Power Financial’s operating earnings totalled $336 million for the quarter, compared with $360 million in the same period in 2011.

IGM Financial Inc., which owns Investors Group and Mackenzie, earned operating earnings available to common shareholders of $179 million or 70 cents per share, compared with $213 million or 82 cents per share a year ago. Its contribution to Power Financial’s operating earnings amounted to $104 million, compared with $125 million.

Power Financial also holds a 50 per cent interest in Parjointco N.V., which in turn holds a 56.5 per cent equity interest in Pargesa, a holding company with significant positions in several European industrial companies including Lafarge.

Pargesa’s contribution to Power Financial’s operating earnings was $56 million for the quarter, down from $63 million.